Facts Supporting Town’s Acquisition of Apple Valley Ranchos Water Company

This article is a press release supplied by the Town of Apple Valley.  

These are facts that support the Town’s acquisition of Apple Valley Ranchos Water Company.

Fact – not misinformation and mischaracterizations designed to erode strong public support for the purchase. The truth is, most local water systems in California are owned by the people, not corporations. This guarantees community members a voice in the rate-setting process. By contrast, a private company needs approval only from the California Public Utilities Commission, which has a long history of leniency when it comes to rate requests. OTHER FACTS Why is the Town pursuing acquisition? Apple Valley Ranchos, by definition, is a “government-granted monopoly.” As a customer, you have no choice but to buy your water from them at whatever price they and the CPUC decide to set. During the past 10 years, those rates have increased significantly, and the company has asked for another 31.55 percent increase over the next three years. How much will acquiring Apple Valley Ranchos cost? The Town is working with an independent appraisal firm to determine a fair purchase price. Watch for details on a Town Hall meeting soon, where this will be shared in detail. Why is it so hard to get a bottom-line number? A lack of transparency from Apple Valley Ranchos’ owners has kept us from fully vetting the company’s financials. Basic information unavailable so far includes auditor’s reports, executive salaries, notes to financial statements, cash flow reports and stockholder equity statements. How would we pay for this purchase? The savings from eliminating the profit margin and other costs will cover the debt service without raising rates or property taxes to do so.

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  1. Fractured facts

    Katrina Siverts claims to know the facts about the Town of Apple Valley’s hostile takeover bid for Apple Valley Ranchos Water Company (“Facts supporting Town’s acquisition of Apple Valley Ranchos Water Company,” The Desert News Post, April 8, 2015). Instead, what she presents are regurgitations of Town talking points, which — typical for the Town — are disingenuous at best.

    The headline contains the word “facts.” The first paragraph contains the word “facts.” The second paragraph starts off with the word “fact.” The only sub-head in the article contains the word “facts.” One might say this article mentions “facts” more than it mentions facts.

    Siverts derides “misinformation and mischaracterizations,” ostensibly coming from Ranchos. In actuality, it is the Town that is divorced from reality, and which is spreading lies and half-truths the way only demagogues can. Virtually everything that comes from the Town needs to be fact-checked. I challenge Siverts to produce one false statement from Ranchos.

    Siverts mentions “strong public support for the purchase.” This is wrong and the Town knows it. The Town cites polls that it says support its position, but engages in all manner of subterfuge to avoid putting the matter to a vote. Clearly, the claimed support isn’t there.

    Siverts writes that most local water systems are owned “by the people,” whatever that means. I suppose she wants you to believe that means that local water systems under the control of some government somewhere, are somehow being controlled by the people, not by the government that actually makes all decisions. In any event, this does not make it a good practice, let alone desirable. As any student of freedom will tell you, government these days is involved in many areas in which it has no business. Water delivery is one of them. Would Siverts make the argument that because most governments are run by liars, who promote (or at least tolerate) waste, fraud, and corruption, we should have liars running Apple Valley and welcome waste, fraud, and corruption? I sincerely hope not.

    Siverts writes that Ranchos needs approval “only” from the California Public Utilities Commission (CPUC). In actuality, this approval comes after months-long processes, and Ranchos never gets what it asks for. Siverts writes approvingly about the Town council setting rates, apparently much like it has with our sewer rates, which have gone up more than our water rates. (Our sewer bill is much higher than our water bill. Our water bill has a cost break-down; no such luck with our sewer bill.) Does Siverts realize that eliminating the CPUC in favor of the Town means that the same people requesting water rate increases will be the people deciding on water rate increases? How can that ever be a good thing?

    Siverts calls Ranchos a “government-granted monopoly,” as if Ranchos somehow colluded with some government somewhere to get this designation. In actuality, Ranchos is not a monopoly, although it has been granted a service area. Part of that “monopoly” status is a franchise tax fee of almost a quarter of a million dollars annually that Ranchos pays the Town of Apple Valley. I don’t hear any complaints about that!

    Siverts also repeats the half-truth that Ranchos has requested a 31.55 percent increase. So what? CPUC never grants Ranchos the full requested increase, which is important information to share.

    Siverts writes that it is difficult to get a “bottom-line number” on what it will cost to buy Ranchos because Ranchos won’t turn over its financials. First, Ranchos is not for sale, so there is no reason for it to turn over anything. Second, pages and pages of Ranchos documentation is available online, including annual financial reports. Far from there being a lack of transparency on the part of Ranchos, there is almost too much information to absorb. Given the way the Town runs its finances, though, it’s not surprising it can’t figure out an accurate financial report. But if you want to talk about lack of transparency, then look no further than the way the Town runs its affairs.

    Siverts finishes up by assuring everyone that it will be easy to buy Ranchos. Really? Repeating a falsehood does not make it so. Regarding the proposed hostile takeover of AVRWC, TOAV doesn’t know what it’s buying, it doesn’t know what it’s going to cost, it doesn’t know where the money is coming from, doesn’t know what the money is going to cost, doesn’t know how to run a water utility, doesn’t know who is going to run the system, and has a history of failure where water systems are concerned. The Town has virtually promised that those “sky high” rates won’t go down until the bond is paid off (30 years hence), and the Draft EIR seems to indicate that should any work be needed on the system, the Town would obtain another bond (which does mean higher taxes). Therefore, there is no way Siverts can guess what water will cost under government control — it’s all smoke and mirrors. So how will it be affordable? By taking those evil profits from Ranchos. This is the type of propaganda you would expect during a Communist takeover, as profits are a key component of free market capitalism, and thus, the American way of life. What the heck is Siverts promoting here, anyway?

    Just in case anyone thought Siverts was being fair and unbiased, she includes a graphic image provided by the Town, which repeats the Town’s standard-issue lies and half-truths.

    The Town already has council members and managers and spokesmen to present its side of the jihad against Ranchos. What we need is unbiased reportage from our news sources. Sadly, this is not what we received from The Desert News Post.

    • The article on water acquisition facts was a press release supplied by the Town of Apple Valley. We failed to make that clear, and it is corrected now. Katrina Siverts, publisher

  2. Thanks for this clarification. Sorry to have lumped you in with other so-called journalists who have checked their objectivity at the door regarding this issue.

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